No. 43401 (New Rule): Rule R277-553. Charter School Oversight, Monitoring and Appeals

(New Rule)

DAR File No.: 43401
Filed: 11/15/2018 03:38:28 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

In the 2018 Legislative Session, the Legislature passed H.B. 313. H.B. 313 (2018) made significant amendments to the process charter school authorizers should follow in approving and providing oversight to charter schools. H.B. 313 (2018) also directed the Utah State Board of Education (Board) to make rules to carry out the legislative changes in relation to the oversight of charter schools and their authorizers.

Summary of the rule or change:

H.B. 313 (208) directed the Board to make rules to carry out the legislative changes in relation to the oversight of charter schools and their authorizers. This new rule, R277-553, governs charter school oversight by authorizers and includes language from repealed rule R277-481. (EDITOR'S NOTE: Rule R277-481 is being repealed in this December 1, 2018, Bulletin under DAR No. 43399.)

Statutory or constitutional authorization for this rule:

Subsection 53G-5-205(5)
Article X, Section 3
Subsection 53E-3-401(4)
Subsection 53G-5-501(5)

Anticipated cost or savings to:

the state budget:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. The Board was funded for a full-time employee (FTE) in the 2018 General Session to absorb the costs, total costs $155,000. The State Charter School Board has staff that will be performing these activities and is funded through the Board.

local governments:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and Utah Center for Assistive Technology (UCAT) will be required to develop policies and practices, and monitor the schools they authorize. The percentage of charter schools not authorized by the Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than an FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually. Iron School District, Jordan School District, Salt Lake School District, Logan City and UCAT are the other authorizers. We anticipate annual costs of $250,000.

small businesses:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and Utah Center for Assistive Technology (UCAT) will be required to develop policies and practices, and monitor the schools they authorize. The percentage of charter schools not authorized by the Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than an FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually.

persons other than small businesses, businesses, or local governmental entities:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and Utah Center for Assistive Technology (UCAT) will be required to develop policies and practices, and monitor the schools they authorize. The percentage of charter schools not authorized by the Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than an FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually.

Compliance costs for affected persons:

This new rule is anticipated to cost state government $155,000 annually and other authorizers approximately $250,000 annually.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are 1,241 entities with a NAICS code 611110 (Elementary and Secondary Schools) operating in Utah according to a "Firm Find Data" search through Utah's Department of Workforce Services. Most of the entities in the list are schools including public schools, charter schools, and private schools. Of the 1,241 entities, there are 15 private businesses, all of which are small businesses (there are no large businesses with a NAICS code 611110). This new rule is anticipated to cost state government $155,000 annually and other authorizers approximately $250,000 annually. The Assistant Superintendent of Financial Operations at the Utah State Board of Education, Natalie Grange, has reviewed and approved this fiscal analysis.

Sydnee Dickson, State Superintendent

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Education
Administration
250 E 500 S
SALT LAKE CITY, UT 84111-3272

Direct questions regarding this rule to:

Angela Stallings at the above address, by phone at 801-538-7550, by FAX at 801-538-7768, or by Internet E-mail at angie.stallings@schools.utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/02/2019

This rule may become effective on:

01/09/2019

Authorized by:

Angela Stallings, Deputy Superintendent of Policy

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

155,000

$155,000

Local Government

$250,000

250,000

Small Businesses

Non-Small Businesses

Other Person

Total Fiscal Costs:

$405,000

Fiscal Benefits

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Persons

Total Fiscal Benefits:

Net Fiscal Benefits:

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

Appendix 2: Regulatory Impact to Non - Small Businesses

There are 1,241 entities with a NAICS code 611110 (Elementary and Secondary Schools) operating in Utah according to a "Firm Find Data" search through Utah's Department of Workforce Services. Most of the entities in the list are schools including public schools, charter schools, and private schools. Of the 1,241 entities, there are 15 private businesses, all of which are small businesses (there are no large businesses with a NAICS code 611110). This rule change is anticipated to cost state government $155,000 annually and other authorizers approximately $250,000 annually.

The Assistant Superintendent of Financial Operations at the Utah State Board of Education, Natalie Grange, has reviewed and approved this fiscal analysis.

R277. Education, Administration.

R277-553. Charter School Oversight, Monitoring and Appeals.

R277-553-1. Authority and Purpose.

(1) This rule is authorized under:

(a) Utah Constitution Article X, Section 3 which vests general control and supervision over public education in the Board;

(b) Subsection 53E-3-401(4), which allows the Board to adopt rules in accordance with its responsibilities;

(c) Subsection 53G-5-205(5), which requires the Board to establish minimum standards that a charter school authorizer is required to apply when evaluating a charter school application and monitoring charter school compliance; and

(d) Subsection 53G--5-501(5), which directs the Board to adopt rules specifying the timeline for remedying deficiencies and ensuring the compliance of a charter school with its charter.

(2) The purpose of this rule is to establish minimum standards that an authorizer is required to apply when monitoring charter school compliance.

R277-553-2. Authorizer Review of Charter Schools.

(1) An authorizer shall review and evaluate annually the performance of charter schools for which it is the authorizer, including requiring all charter schools to:

(a) comply with their charter agreements; and

(b) comply with statute and board rule.

(2) An authorizer shall:

(a) visit a charter school at least once during its first year of operation in order to ensure adherence to an implementation of the approved charter and to finalize a review process;

(b) visit a charter school as determined in the review process;

(i) strengths;

(ii) deficiencies; and

(iii) proposed corrective actions;

(d) notify the Superintendent of a claim of fraud or misuse of public assets or funds by a charter school; and

(e) coordinate the investigation of claims identified in Subsection (d) with the Superintendent.

(3) An authorizer shall annually review, and document matters specific to effective charter school operations, including:

(a) financial performance;

(b) academic performance;

(d) governing board performance.

(4) An authorizer shall conduct and document a comprehensive review of governing board performance and review the charter agreement at least once every five years.

(5) An authorizer shall coordinate with the Superintendent to regularly review its charter schools as described in Subsection 53G-5-205(2).

R277-553-3. Remediation and Probation.

(1)(a) An authorizer shall develop a written policy documenting the process and for remediation of any deficiencies identified through the processes outlined in Section R277-553-2.

(b) An authorizer shall submit a copy of their remediation policy to the Board for approval along with their policy for approving new charters under Section R277-552-3.

(c) Notwithstanding Subsection (b), each authorizer shall submit a remediation policy to the Board for approval by January 1, 2020.

(2) If a school fails to remedy deficiencies through the remediation process, an authorizer may place the school on probation for no longer than one calendar year.

(3) Upon placing a school on probation, an authorizer shall set forth a written plan outlining those provisions in the charter agreement, applicable laws, rules, and regulations with which the school is not in compliance.

(4) The written plan required by Subsection (3) shall:

(a) set forth the terms, conditions, and timeline that the school shall follow in order to be removed from probation; and

(b) a plan for further remedial action if the school fails to comply with probationary terms.

(5) If a school complies with the terms of the written plan within the timeline prescribed, the authorizer shall remove the school from probation.

(6) A school may request a single extension of no more than six months from an authorizer to comply with the terms of the written plan.

(7) If a school fails to satisfy the terms of the written plan within the established timeline, the authorizer shall propose to terminate the school's charter.

(8) While a school is on probation, the school may seek technical assistance from the authorizer to remedy any deficiencies.

(9) An authorizer may, for good cause, or if the health, safety, or welfare of the students at the school is threatened at any time during the probationary period, terminate the charter immediately.

(10) An authorizer shall notify the Superintendent in writing within 30 days of any probationary terms imposed under this Section R277-553-3.

(11) An authorizer shall comply with the notification requirements in Section 53G-5-504 if the authorizer approves a motion to terminate a charter.

R277-553-4. Charter School Governing Board Compliance with Law.

(1) A charter school governing board may amend the charter school's charter agreement by receiving approval from its authorizer consistent with Section 53G-5-303.

(2) A charter school governing board shall comply with the charter school's authorizer's processes and timelines for all reviews, amendments, expansion requests, and satellite applications.

(3) A charter school shall notify the Superintendent and charter school's authorizer of lawsuits filed against the charter school within 30 days of the school being served with the complaint.

R277-553-5. Charter School Financial Practices and Training.

(1)(a) A charter school shall hire or contract with a business administrator to perform the duties described in Section 53G-4-303.

(b) A charter school business administrator shall attend business meetings required by the Superintendent or the school's authorizer.

(2) A charter school board shall:

(a) regularly monitor the charter school's business administrator described under Subsection (1); and

(b) ensure the business administrator fulfills the duties outlined in Section 53G-4-303.

(3) The Board may impose corrective action against a charter school for failure to provide financial and statistical information required by law or Board rules in accordance with Rule R277-114.

(3) A charter school shall comply with the Utah State Procurement Code, Title 63G, Chapter 6.

(4) A charter school may not receive necessarily existent small schools funding under Subsection 53F-2-304(2) and Rule R277-445.

R277-553-6. Remedying Charter School Deficiencies.

(1) Upon receiving credible information of charter school financial mismanagement or fraud, or a threat to the health, safety, or welfare of students, in coordination with the Superintendent an authorizer shall direct an independent review or monitoring, as appropriate.

(2) An authorizer may direct a charter school governing board or the charter school administration to take reasonable action to protect students or state or federal funds consistent with Section 53G-5-503.

(3) Upon receipt of findings documenting a threat to the health, welfare, or safety of a school under Subsection (1), an authorizer may:

(a) recommend that the Superintendent impose corrective action against the school in accordance with Rule R277-114;

(b) take immediate or subsequent corrective action with charter school governing board members or employees who are responsible for deficiencies consistent with Section 53G-5-501;

(d) immediately terminate the school's charter in accordance with Subsection 53G-5-503(5).

(4) Upon receipt of findings documenting financial mismanagement or fraud by a charter school, an authorizer shall coordinate appropriate corrective action with the Superintendent.

(5) An authorizer may exercise flexibility for good cause in making a recommendation regarding an identified deficiency.

R277-553-7. Appeals to the Board.

(1) An operating charter school may appeal an authorizer's decision to terminate the school's charter to the Board.

(2) Upon terminating a charter, an authorizer shall:

(a) provide written notice to the charter school;

(b) provide written notice of appeal rights and timelines to the charter school governing board chair or authorized agent; and

(c) post information about the appeals process on its website and provide training to charter school governing board members and authorized agents regarding the appeals procedure.

(3) If a charter school appeals an authorizer's decision to terminate a charter, the charter school governing board chair shall submit a written appeal to the Superintendent within 14 calendar days of the authorizer's action.

(4)(a) Upon receipt of an appeal under this section, Board leadership may:

(i) set a hearing before a standing committee to make a recommendation to the Board for consideration at its next regularly scheduled meeting;

(ii) designate three to five Board members and a hearing officer, who is not a Board member, to act as an objective hearing panel to conduct a hearing and provide a recommendation to the Board for consideration at its next regularly scheduled meeting; or

(iii) set a hearing before the full Board.

(b) A hearing under Subsection (4)(a) shall be held no more than 45 days following receipt of the written appeal.

(5) The Board shall:

(a) uphold the authorizer's decision; or

(b) remand the matter to the authorizer with identified deficiencies in the authorizer's decision and suggested remedies.

(6) The recommendation of the chartering entity shall be in place pending the conclusion of the appeals process, unless the Superintendent in the Superintendent's sole discretion, determines that the authorizer's decision or failure to act presents a serious threat to students or an imminent threat to public property or resources.

(7) The Board's acceptance or rejection of the hearing report is the final administrative action on the issue.

KEY: charter schools, oversight, monitoring, appeals

Date of Enactment or Last Substantive Amendment: 2018

Authorizing, and Implemented, or Interpreted Law: Art X Sec 3; 53E-3-401; 53G